How to Calculate a Salary Raise Percentage

The formula

Raise % = (new salary − old salary) ÷ old salary × 100. This is the same percentage-change formula used everywhere else percentages compare a before-and-after value — a raise is just a percentage increase applied to your pay specifically.

The base for the calculation is always the old salary, not the new one — a common mix-up. $5,000 is a 9.09% raise on a $55,000 salary, but that same $5,000 would only be an 8.33% raise if calculated (incorrectly) against the new $60,000 figure.

What counts as a good raise

A standard annual cost-of-living raise typically runs 2–4%, roughly tracking inflation. A merit raise for solid performance is commonly 3–5%. A promotion or a raise tied to taking on significantly more responsibility often lands in the 10–20% range, and a raise from switching employers entirely frequently exceeds that — job switchers have historically out-earned people who stay, specifically because internal raises are capped more conservatively than what a new employer will offer to win a candidate.

Context matters more than the percentage alone: a 3% raise in a year of 6% inflation is a real pay cut in purchasing power even though the number on paper went up.

Turning a target dollar amount into the ask

Working backward is just as useful heading into a negotiation: decide the dollar amount you want, divide by your current salary, and you have the percentage to ask for. Wanting an extra $4,000 on a $52,000 salary is an 7.7% ask — framing the conversation in the number that matters (percentage relative to your current pay) rather than just the raw dollar figure.